Citizenre

The Citizenrē Corporation

Type	Private
Industry	Solar
Founded	2005 Startup company
Headquarters	Wilmington, DE, USA
Key people	David C. Gregg, President & CEO
Employees	Approx. 7 plus approx. 1300 independent sales associates
Website	www.citizenre.com

Citizenrē is a renewable energy startup company that plans to rent photovoltaic (PV) solar systems to homeowners in the United States. The name Citizenrē is a combination of the word "citizenry" with the abbreviation "RE" which stands for renewable energy.

Business plan

The company's business plan is based on the premise that they can reduce the cost of generating electricity by cheaply manufacturing and installing company owned residential roof top solar electric panels. The electricity produced will be purchased by householders under contract to Citizenrē. Excess power produced during daylight hours will be "banked" with local electric utilities by net metering to be drawn on at night.

The company plans to construct its own PV manufacturing plant, with production beginning some time after that (see section on criticisms for more on the plant delays), and will franchise local installers to customize and install the systems. The sales and marketing is being conducted through independent contractors using a network marketing model.

System overview

The Citizenrē REnU system (REnU = Renewable Energy Unit) is based on the plan of renting solar systems to customers, fixing their utility costs to CitizenRE, and then selling the excess power back to the power company, along with getting income from any cap and trade certificates (SRECS) received for producing clean energy. The customer signs a fixed-length contract to pay a flat rental rate that is fixed for 10 years with an option to renew for another 5 years. The rate for each homeowner is determined by the average rate of their local electric utility.

In effect, the customer gets much of the benefit of owning a solar system without the inherent risks. The customer gets positive cash flow from the first month. Besides that, if they move, sell their home, or rent their home, they can transfer or cancel the lease without penalty (that is why they call it a rental). If electric prices go up in 15 years, the customer benefits by not having to pay them. If electric prices go down (due to Bloom Box, or income from stabilizing the grid with electric car batteries, for example) then the customer still has the same fixed rate for 10 years. In almost all cases this is projected to make customers secure and happy with their purchase. They are part of the "solution" rather than being part of the problem.

Benefits of the Citizenrē business plan

The Citizenrē system has a number of benefits:

1. Broadening the solar PV market. Currently, a PV system can cost an average homeowner more than US$40,000. The market is currently aimed at luxury homes, and remote homes that have no electric grid access. By lowering the entry cost, without incurring consumer debt, the solar PV market will be able to expand to include the huge middle class suburban homeowner.
2. Reduction of dependence on dirty power sources. Citizenrē hopes to encourage the U.S. to be able to adopt solar for 25% of electric power needs by the year 2025.^[1]
3. Encourages distributed power generation. Having power generated where it is consumed reduces the effects of loading in the electric grid. This will be particularly beneficial on hot summer days when the grid load is at peak, and solar generation is also at its peak.
4. Provides cost savings to consumers. Because PV systems generate a known amount of power from a device of known upfront cost, and does so without consumables, means that Citizenrē can enter into long-term contracts with customers, essentially preventing a rise in the price of electricity. Even if the rates of the local utilities rise due to resource costs, labor costs, or inflation, the Citizenrē customer's rates remain at the original price for the entire contract period.
5. System size matched to usage. The Citizenrē system is continually adjusted as necessary to provide the correct amount of power for each customer. For example, if some members of the household move away, Citizenrē will reduce the number of panels on the home.
6. Promotes energy efficiency first Online videos and tutorials from sustainability expert Chris Prelitz encourage reducing electrical consumption with energy efficiency and behavior change as a first step measure before doing solar.

Criticism of Citizenrē

Although the company is still in startup mode, it has drawn criticism from some existing solar industry players. The main areas of criticism are:

1. Value of each individual system. The Citizenrē business model requires an install cost of less than half of the current solar installation price per kilowatt. Some in the industry feel this claim is impossible^[2], and is evidence that CitizenRE is not a true player in the industry. The company counters that this will be solved through their vertical integration and standardized installation techniques.
2. Corporate funding. The company says that they will acquire US$650 million in loans to build a manufacturing plant. This claim has been made since 2007^[3], and has not yet borne fruit.
3. Sales model. The company has instituted a network marketing strategy, ostensibly to begin sales at a very low cost. Although there are negative associations to network marketing companies, Citizenrē is quick to point out that there is no cost to join their sales network, and no need for the sales people to make any purchases, thus preventing abuse. The current sales model has yet to make anybody any money.
4. Installation waiting list. Installations cannot begin until the manufacturing plant is built and the installer franchises are in place. Originally the completion date was late 2007 and has been repeatedly pushed back. The most recent stated date was 2009, but that date has passed with no update from the company.
5. Industry shakeup. Many current solar installers are afraid they will lose customers to Citizenrē's claims of solar with no initial cost. Citizenre counters that they provide initial and annual training to anybody wanting to be a sales associate, and that this training will uplift the industry.

References

1. ^ Citizenrē Roadmap
2. ^ http://www.renewableenergyworld.com/rea/news/article/2007/02/citizenre-a-house-of-cards-47419 Criticism from industry veteran
3. ^ http://www.scribd.com/doc/267769/Citizenre-Press-Release/ CitizenRE press release from 2007

External links

• Citizenre Corporate website
• Wired Magazine article
• Article in Renewable Energy Access
• Criticism in Renewable Energy World